As a household employer, you only withhold and pay social security and Medicare taxes if the cash wages you paid her exceed the threshold amount for the year.Your nanny is considered your household employee and you're her household employer: For more information on making federal tax deposits, see section 11 of Publication 15. Employers must deposit all employment taxes electronically by electronic funds transfer (EFT). You can complete the IRS e-file application online after registering for e-services. Prospective participants must first complete and submit an IRS e-file application. The Modernized e-File (MeF) for Employment Taxes and E-File Employment Tax Forms pages offer ways to file Forms 940, 941, and 944 electronically. Employers should consult each form’s instructions or Publication 15 to determine when and how to make deposits. Monthly or semiweekly deposits may be required for taxes reported on Form 941 (or Form 944), and quarterly deposits may be required for taxes reported on Form 940. Employers must also file a Form W-2, Wage and Tax Statement annually for each employee along with a Form W-3, Transmittal of Wage and Tax Statements, and furnish a copy of the Form W-2 to the employee. See Topic 759 for more information about Form 940. Employers are also generally required to file Form 940 annually. See the Instructions for Form 944 for more information. However, some small employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less for the year) may file Form 944 annually instead of Forms 941. Generally, employers are required to file Forms 941 quarterly. Also, refer to Form 941, Employer's QUARTERLY Federal Tax Return and the Instructions for Form 941, or Form 944, Employer's ANNUAL Federal Tax Return and the Instructions for Form 944, or Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return and the Instructions for Form 940. Use Publication 15, (Circular E), Employer's Tax Guide, Publication 15-A, Employer's Supplemental Tax Guide, and Publication 15-T, Federal Income Tax Withholding Methods to determine the amount of withholding and the directions on depositing the withheld amounts and other employment taxes.Secure a completed Form W-4, Employee's Withholding Certificate from each employee to know how much federal income tax to withhold from your employee's wages.
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